Jack Paul 
Blockchain data platform Bubblemaps said it identified a cluster of nine Polymarket wallets that collectively earned $2.4 million with a 98% win rate on contracts tied to US military operations. The wallets placed all their major bets just before key military developments, including the Feb. 28 attack on Iran, the killing of Iranian Supreme Leader Ayatollah Ali Khamenei, and the US-Iran ceasefire agreement, Bubblemaps wrote in a Monday X post.
The accounts were all funded through centralized crypto exchanges in a tight timeframe. They also made some minor losing bets on Feb. 20, which likely served to “avoid attention,” according to Bubblemaps. Four of those wallets each made around $400,000 in profit on bets that the US would strike Iran on Feb. 28.
Insider trading concerns grow
The investigation highlights the growing insider trading concerns tied to decentralized prediction markets such as Polymarket and Kalshi. While the data platform does not have definitive proof that the accounts belonged to insiders, the onchain trail is “symptomatic of someone with an unfair informational advantage,” Nicolas Vaiman, the CEO of Bubblemaps, told Cointelegraph.
This is not an isolated case. US lawmakers have previously proposed new laws to fight insider trading on military contracts within prediction markets. On March 10, US Democratic Party Senator Adam Schiff introduced the DEATH BETS Act, which seeks to ban federally regulated prediction markets from listing contracts tied to war, terrorism, assassination, and individual deaths. The bill came shortly after six Polymarket traders netted $1 million by betting on the US strike against Iran.
Regulatory actions gain momentum
In late March, California Governor Gavin Newsom signed an executive order to curb public servants from insider trading on prediction markets tied to political or economic events they can influence. Politics-related contracts are currently the third-largest category on Polymarket, accounting for 12% of notional trading volume, and the fifth-largest on Kalshi, where they account for 0.7% of weekly trading volume, according to Dune data.
The findings from Bubblemaps and the push for regulation suggest that decentralized prediction markets may face increased scrutiny. While these platforms offer a novel way to bet on real-world events, the lack of safeguards against insider trading remains a sticking point for lawmakers and watchdogs alike.